Technical Standards for PACE Matt Golden, Efficiency.org Dub Taylor, Texas State Energy Conservation Office

Energy Efficiency Project Barriers

Breaking Down Barriers to EE Finance PerformanceRisk CreditRiskAssetRisk On-Bill Repayment Commercial PACE Green Banks Benchmarking Asset Labeling Disclosure Project Finance Long-term financing of projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors.

Investor Ready Energy Efficiency™ IREE is the” logo in the lobby”, like LEED but for a building retrofit project.

Near-Term: Increase Deal-Flow Increase Confidence in Savings Reduce Transaction Costs Streamline Origination Process Standardized Performance Data Project Finance Underwriting Enable Portfolios and Securitization Long-Term: Market Transformation

PACE Technical Standards – why? PACE is least aligned with performance risk – Owner accepts liability (lien) without defined, offsetting benefit Owners don’t believe savings are real – Savings to Investment Ratio (SIR) – What about non-energy benefits - tenant retention, etc…? Keeping transaction costs low – where is balance point?

Basis for Technical Standards TEXAS LOCAL GOVERNMENT CODE Sec REVIEW REQUIRED. (a) A program established under this chapter must require for each proposed qualified project: (1) a review of water or energy baseline conditions and the projected water or energy savings to establish the projected water or energy savings; and (2) a verification that a proposed qualified improvement meets the requirements of a qualified project. (a-1) A verification provided as required under Subsection (a)(2) conclusively establishes that the improvement is a qualified improvement and the project is a qualified project. Qualified improvement A permanent improvement fixed to real property and intended to decrease water or energy consumption or demand, including a product, device, or interacting group of products or devices on the customer's side of the meter that uses energy technology to generate electricity, provide thermal energy, or regulate temperature. Qualified project The installation or modification of a qualified improvement. Real property Privately owned commercial or industrial real property or residential real property with five or more dwelling units.

Basis for Technical Standards TEXAS LOCAL GOVERNMENT CODE (cont.) Sec REVIEW REQUIRED. (b) After a qualified project is completed, the local government shall require written verification that the qualified project was properly completed and is operating as intended. (c) A baseline water or energy review or verification review under this section must be conducted by an independent third party. Pace in a Box Toolkit - Technical Standards

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